In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Archives: 06/2008

Health Affairs has just published a new study of the Massachusetts health care plan by Urban Institute scholar Sharon Long. Media coverage has generally been positive, hailing the Massachusetts experiment as a success. But a closer look leads to a far less sanguine conclusion. Among other things, the study shows that:

Slightly less than half of Massachusetts’ uninsured population actually complied with the mandate. True, the number of people without health insurance was reduced from 13% of the state’s population to 7%, but when the bill was passed, advocates promised that “all Massachusetts citizens will have health insurance.” Perhaps it depends on your definition of “all.”

Most of those who are signing up are low-income individuals, whose coverage is fully or partially subsidized, proving once again that if you give something away for free people will take it. It certainly appears that it is the expensive and generous Massachusetts subsidies (up to 300% of the poverty level), not the unprecedented individual mandate that is responsible for much of the increased coverage.

Adverse selection remains a big problem, with the young and healthy failing to comply with the mandate. The state refused to change its community rating laws which drive up the cost of insurance for young, healthy individuals. Not surprisingly, they don’t find this a good deal.

The program is far exceeding its projected costs, with at least a 33% budget overrun in its first year.

The program has increased demand for health care services without increasing the supply of providers. As a result, patients are having trouble finding providers and waiting lists (Canada here we come) are beginning to develop.

According to this site, the Iraq correspondent Richard Engel’s book has some pretty startling words from the Commander-in-Chief in it. Try a few of these on for size:

“This is the great war of our times. It is going to take forty years,’” [Bush told Engel]. Bush said in forty years the world would know if the war on terrorism, and conflicts in Iraq and Afghanistan, had reduced extremism, helped moderates, and promoted democracy.

Bush admits to Engel that going to war was a decision based on his personal instinct and not on any long-range strategy for the Mideast: “I know people are saying we should have left things the way they were, but I changed after 9/11. I had to act. I don’t care if it created more enemies. I had to act.”

Bush tells Engel that the election of Hamas was actually a positive development because it pressured Palestinian Authority chairman Mahmoud Abbas to make reforms: “I think the election of Hamas was a good thing. It proved to Abbas he was failing. I told Abbas, ‘You lost the election because you aren’t providing for your people, jobs, education, what people want.’ Now they know they have to compete.”

Looks like there will be lots to chew on in there. And we’ve got at least 35 or so more years to chew on it.

Shane Harris’ National Journalcover story on the Chinese “cyber-invasion” is meant to alarm us. The story claims that Chinese hackers doing their government’s bidding are stealing our secrets and maybe felling our power grids. It quotes US officials comparing the consequences of cyber-attacks to those of nuclear weapons. The cover depicts a red dragon crawling on to an American shore. A subtitle sees “a growing threat.”

Don’t burn your wireless card yet though. There may be a US cyber-panic, but the Chinese cyber-threat is overblown.*

The most shocking and least plausible claim in the article is that Chinese hackers caused the massive blackout in 2003 and a recent power outage in Florida. I’m not an expert on cyber-security, so I’ll leave it to Bruce Schneier and Wired blogger Kevin Poulsen to attack this theory.

But anyone can see dodgy sourcing. Harris’ blackout scoop comes from the former president of something called the Cyber Security Industry Alliance who claims that he heard it from intelligence sources. In support of this contractor’s claim, the article quotes a bunch of federal officials paid to combat cyber-threats. They say, essentially, “Yes, it’s possible the Chinese did this, but we can’t say more.” Technical details aren’t included. It’s a secret, we’re told. The article only briefly discusses the very plausible explanations for both blackouts that don’t involve Chinese hackers. In the 2003 case, at least, that multi-causal story is backed by extensive investigations on the public record.

Another problem is the article’s uncritical acceptance of the claim that the Chinese government employs a hacker militia to attack US websites. No evidence is offered beyond the assertions of an intelligence official employed to combat cyber-threats, a security contractor who works for such officials, and one consultant / analyst. No doubt there are lots of Chinese hackers breaking into US networks. After all, there are lots of Chinese. But why should we believe that these hackers are agents of the Chinese state rather than bored teenagers in internet cafés? However malicious its intent, why would the Chinese government want to outsource its espionage to a bunch of underemployed programmers?

The story also reports on several Chinese efforts to steal information from US corporate executives and government officials. These stories are plausible – but two caveats could have been highlighted. First, our military and intelligence agencies almost certainly hack into Chinese networks and steal information. Second, there is no official claim in this story or elsewhere, despite all the sound and fury, that Chinese hackers have broken into classified US networks and gathered useful information.

Finally, the story should have quoted someone pointing out the absurdity of the claim made by Vice Chairman of Joint of Staff Gen. James Cartwright that cyber-attacks are comparable to weapons of mass destruction attacks, which means nuclear explosions, among other things. By most definitions, cyber-attacks have been going on a long time. They have killed either no one or almost no one. Yes, one can imagine scenarios where hackers trigger mass casualties. But equating these outlandish what-ifs to a nuclear weapon is either an assault on the meaning of “mass destruction” or threat inflation of first order. (I say this despite an article/ heroic epic in the same magazine depicting General Cartwright as a kind of cross between Napoleon and Jack Welch.)

I keep reading about the cyber-war we’re supposed to be fighting with China. Reading this story, I don’t see it. There are evidently a lot of Chinese hackers (not necessarily government-sponsored), and a bunch of Chinese electronic espionage (not necessarily successful). That’s a problem, not a war.

For a sober take on these matters, read James Lewis of the Center for Strategic and International Studies.

*I’m usually a fan of the National Journal and Shane Harris’ writing in it, so I chalk this up to an off-week.

This is, put simply, an unacceptable abdication of our moral responsibilities. Even though our standing in the world has been severely diminished by Iraq, we should at least be debating intervention in Burma. There are, no doubt, many logistical complications and unintended consequences that would follow from such a policy. But there are also reasons why it should be a live option. The goal of such an intervention need not be regime change; it should simply be to make sure that a vulnerable population receives the supplies it desperately needs. Of course, if violating the sovereignty of a murderous regime happens to undermine that regime’s legitimacy, then that would not be such a terrible result. But this does not necessarily have to be our goal.

One should not, I suppose, be too surprised that this sort of slipshod advocacy still emanates from the epicenter of liberal imperialism, a publication that was as influential as any in urging the Iraq war on the American people. (Neither should the fact that its leadership attempted to make their non-apology apology for Iraq look magnanimous.) The piece’s curtsy at post-Iraq reality is even sort of endearing, in a child-like way.

Note also the focus not on the particular policy of invading and taking responsibility for disaster relief in Burma, but rather on the importance of “debating” such a policy. After all, the New Republic’s writers aren’t going to be the ones to invade the country and deliver the aid. Rather, the important question is whether the political climate will allow for TNR’s writers to churn out tough-minded and uncompromising articles that allow them to stretch their rhetorical legs yet still keep them within the beloved Broderian mainstream of American politics.

But maybe the most disappointing point of that paragraph is that instead of the rote “to be sure” formulation, the editors chose to dodge completely the substance of the policy they’re advocating for by using the more indirect “there are, no doubt, many logistical complications…” phrasing. Write what you know, guys.

The case is called United States v. Santos and the issue was how to interpret the term “proceeds” in the federal money laundering statute. The case was easy and should have been unanimous. When a term in a criminal law is unclear, the defendant should get the benefit of the doubt, not the rule-making, rule-enforcing state. That’s a legal doctrine called the “rule of lenity.” Unfortunately, the Supremes do not apply that rule consistently. Happily, the Court reached the correct outcome today. Here’s the money quote from Scalia: “When interpreting a criminal statute, we do not play the part of a mind reader.” The “we” in that sentence referred to the justices. But that goes double for the individuals & business firms that are regulated by vague federal regulations.

The newest justices, Alito and Roberts, are showing their pro-state tendencies again.

Hyman and Horwitz are now mixing it up in an online debate over at the University of Pennsylvania Law Review’s PENNumbra.com. Readers will find a good synopsis of Hyman’s book, as well as a good point-by-point critique. Medicare’s critics will enjoy how Hyman likens Medicare – and many of its apologists – to mobsters. Also available in pdf.